Barnes & Noble today announced its results for the third quarter of fiscal 2011, recording $2.3 billion in total sales, a 7 percent increase over the same quarter last year.
The company’s online sales jumped 64 percent over the year-ago period, and brick-and-mortar sales increased 7.3 percent, beating the forecast of 5 percent to 7 percent growth.
The company said online and bookstore sales benefited from strong consumer demand for the B&N NOOK eReader products and related accessories, as well as the company’s expanded Toys & Games selection.
William Lynch, CEO of Barnes & Noble, said the third quarter was successful in advancing the company’s strategic objectives. “In the digital area, our eContent business continues to scale quickly such that we now sell twice as many eBooks as we do physical books at BN.com,” Lynch said in a statement. “NOOK Color, launched in the third quarter, was named the best dedicated eReader by the Associated Press. We’re very encouraged by the sell-through of that break-through device, as well as the newly launched NOOK Newsstand subscription service and NOOK Kids children’s digital library.”
Barnes & Noble College Booksellers comparable store sales decreased 2.2 percent as compared to the prior year period. The company blamed “inclement weather that affected many campuses throughout the country and extended the rush season from January into February,” for poor student sales.
For the third quarter, the company reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $170.1 million, in-line with guidance of $160 million to $190 million. Consolidated third-quarter earnings were $60.6 million, or $1 per share, also in line with previously issued guidance of 90 cents to $1.20 per share.
The company has declined to offer guidance for its fourth quarter, citing the filing of Chapter 11 bankruptcy protection by a “competitor,” most likely Borders. Barnes & Noble said the potential short-term impact that the competitor’s announced store closures may have in the marketplace would cause too much uncertainty to offer accurate guidance.
Additionally, the company’s board of directors has decided to suspend its quarterly dividend payment of 25 cents per share, which will provide the company the financial flexibility to continue investing in its “high growth digital strategies, while simultaneously allowing the company to take advantage of any other market opportunities that may present themselves.”
